Company Overview - Coeur Mining is identified as a fast-growing silver-gold producer with high-quality assets [1] - The company is currently at an inflection point, necessitating a shift in focus towards profitability, reducing leverage, and returning capital to shareholders [1] Investment Outlook - The investment outlook emphasizes the importance of protecting investments and being cautious in the market [1]

Three gold stocks: Which one should you buy?At long last, it's Friday, and a turbulent week of selling, buying, and even more selling is at an end.Investors seem exhausted by the roller-coaster week. Major market indices are slightly in the green as traders pause in relief, unfazed by the latest economic news that China is retaliating from the most recent U.S. tariffs hike on Chinese exports (to 145%) by raising its own tariff on U.S. exports to 125%. Gold stocks, meanwhile, are looking like one bright pock ...

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Financial Data and Key Metrics Changes - In 2024, Coeur Mining, Inc. achieved over $1 billion in revenue, with adjusted EBITDA more than doubling to $339 million compared to the prior year [5][26] - The company generated $85 million in free cash flow and reduced debt by $80 million, resulting in a net debt to EBITDA ratio of 1.6 times, down from 3.4 times a year ago [4][27] - Capital expenditures were cut in half to $183 million, allowing for increased exploration expenditures of approximately $60 million [26] Business Line Data and Key Metrics Changes - Production from North American operations is expected to exceed 400,000 ounces of gold and over 18 million ounces of silver in 2025, representing increases of 20% and 62% year-over-year, respectively [5][12] - Rochester's silver production increased by 34% and gold production by 63% compared to the previous quarter, contributing over $12 million in free cash flow [9][10] - Palmarejo's gold and silver production increased by 8% and 3% year-over-year, respectively, leading to a record free cash flow of $108 million [12][14] Market Data and Key Metrics Changes - The company anticipates record levels of EBITDA, earnings, and free cash flow in 2025, driven by higher production levels and commodity prices [6][29] - The addition of the Las Chispas operation is expected to enhance production and cash flow generation [28] Company Strategy and Development Direction - Coeur Mining is focused on becoming a larger scale, lower-cost silver and gold producer with a conservative balance sheet, following significant investments in recent years [4] - The company plans to aggressively pay down debt using free cash flow generated from operations and the recent acquisition of Silvercrest [6][29] - Exploration efforts are expected to continue, with a budget of approximately $85 million for 2025, aimed at bolstering inferred resources for future conversion [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for 2025, citing strong fundamentals for gold and silver and a solid platform of operations [34] - The first quarter of 2025 is expected to be challenging due to one-time outflows, but absent these, free cash flow would have been positive [31][32] Other Important Information - The company has seen significant increases in gold and silver reserves due to exploration investments, with gold reserves up 26% and silver reserves up 30% over the past five years [7] - The successful ramp-up of the Rochester expansion and the acquisition of Las Chispas are key drivers for anticipated growth [6][28] Q&A Session Summary Question: Update on Las Chispas acquisition cash and bullion - The acquisition included $153 million in cash and $40 million in bullion, with a balance closer to $100 million at closing due to expenses [41] Question: Kensington cost per ounce increase and Rochester crush size issue - Kensington's costs are rising due to increased activity and sensitivity to ore grade, while Rochester's crush size issue was addressed by placing higher-grade material directly on the leach pad [43][44][53] Question: Rochester's winter production and leach kinetics - Production is expected to be back-weighted due to leach kinetics and weather conditions, with improvements anticipated as operations ramp up [60][64] Question: Rochester fragmentation and grind size - The company is targeting an 80% success rate for the five-eighths inch size fraction, with ongoing optimization efforts [67][68]

Core Insights - Coeur Mining reported quarterly earnings of $0.11 per share, missing the Zacks Consensus Estimate of $0.15 per share, compared to a loss of $0.02 per share a year ago, indicating an earnings surprise of -26.67% [1] - The company posted revenues of $305.4 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 4.95%, and showing an increase from year-ago revenues of $262.1 million [2] - Coeur Mining shares have increased approximately 12.4% since the beginning of the year, outperforming the S&P 500's gain of 4.2% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.16 on revenues of $323 million, and for the current fiscal year, it is $0.58 on revenues of $1.42 billion [7] - The estimate revisions trend for Coeur Mining is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Industry Context - The Mining - Non Ferrous industry is currently in the bottom 37% of over 250 Zacks industries, suggesting that the outlook for the industry can significantly impact stock performance [8] - Another company in the same industry, Energy Fuels, is expected to report break-even quarterly earnings per share, with revenues projected to be $45.25 million, reflecting a year-over-year increase of 9527.7% [9]

Environmental Compliance and Management - Expenditures for environmental compliance in 2025 are expected to range from $12.3 million to $13.3 million[25] - The company has achieved a 35% net intensity reduction target for GHG emissions by the end of 2024 compared to the base year[42] - The company has increased the amount of renewable energy in its purchased electricity through formal agreements with energy providers[42] - The company is implementing a Biodiversity Management Standard to enhance its environmental stewardship[42] - The company has formalized a Tailings Management Policy and committed to adopting the Global Industry Standard on Tailings Management (GISTM)[42] - The company is actively managing GHG emissions and enhancing climate disclosures in line with TCFD recommendations[42] - The company is conducting site-specific environmental risk reviews and utilizing key performance indicators (KPIs) to evaluate performance results by mine[39] - The company is pursuing a systematic approach to environmental management to mitigate risks and improve performance continuously[39] - The company is committed to responsible production and best practices in environmental performance[39] Employee and Workforce Information - The company has approximately 2,116 employees, with 1,176 in the U.S., 71 in Canada, and 869 in Mexico[28] - Employee participation in the 2023 culture assessment was 84%, exceeding industry benchmarks[29] - The average employee earns over 40% more than the average employee in their local markets according to industry benchmarking[37] - The company has provided over 40 apprenticeships and internships in 2024, hiring an average of 60% of new hires from local communities since 2018[36] - The company has engaged a third-party mental health care provider to assist employees and their families in accessing quality care[38] - The company has implemented a Total Worker Health program in 2023 to promote worker well-being[38] Mining Operations and Production - The Kensington underground gold mine began operations in 2010, while the newly acquired Las Chispas underground silver-gold mine started operations in 2022[23] - The Rochester mine completed a significant expansion in 2024[23] - The company produces gold and silver doré, as well as gold concentrate, which is sold under long-term offtake agreements[21] - The company has entered into derivative contracts to protect the selling price for certain anticipated gold and silver production[20] - The company is in the process of amending existing permits at the Palmarejo complex, including a significant operating permit set to expire in October 2025[26]

Financial Performance - Coeur reported Q4 2024 revenue of $305 million, with full-year revenue reaching $1.1 billion, a 34% increase from $821 million in 2023[1][9]. - Revenue for the year ended December 31, 2024, increased to $1,054,006,000, a 28.4% rise from $821,206,000 in 2023[75]. - Net income for 2024 was $58,900,000, compared to a net loss of $103,612,000 in 2023, marking a significant turnaround[75]. - The company reported a basic income per share of $0.15 for 2024, recovering from a loss of $0.30 per share in 2023[75]. - Adjusted EBITDA for 2024 was $339,152,000, with an adjusted EBITDA margin of 32%[79]. - Cash provided by operating activities for 2024 was $174,234,000, significantly higher than $67,288,000 in 2023[77]. - Free cash flow for 2024 was $(8,954,000), an improvement from $(297,329,000) in 2023[83]. - Total debt as of 4Q 2024 was $590,058,000, with net debt at $534,971,000, indicating a leverage ratio of 1.6[87]. Production and Guidance - Full-year 2024 gold production totaled 341,582 ounces, and silver production was 11.4 million ounces, representing year-over-year increases of 8% and 11%, respectively[3][9]. - 2025 production guidance is set at 380,000 - 440,000 ounces of gold and 16.7 - 20.3 million ounces of silver, reflecting expected year-over-year increases of 20% and 62%, respectively[4][17]. - Gold production in Q4 reached 26,931 ounces, compared to 24,104 ounces in the prior period, with full-year production totaling 95,671 ounces, within the guidance range of 92,000 - 106,000 ounces[37]. - For the full year 2024, gold production reached 108,666 ounces and silver production reached 6.8 million ounces, exceeding guidance ranges of 95,000 - 103,000 ounces of gold and 5.9 - 6.7 million ounces of silver[22]. - Full-year 2025 production is expected to be 92,500 - 107,500 gold ounces, with CAS projected at $1,700 - $1,900 per gold ounce[42]. Costs and Expenses - Adjusted CAS for gold and silver on a co-product basis increased 9% and 26% quarter-over-quarter to $894 and $15.92 per ounce, respectively, driven by lower metal sales[22]. - Adjusted costs applicable to sales for 2024 totaled $595,261,000, with gold sales averaging $1,203 per ounce[89]. - The company is focusing on cost management strategies to enhance profitability across its operations[106]. - Adjusted costs for gold in 2024 are expected to be between $950 and $1,150 per ounce, while silver is projected at $15.50 to $16.50 per ounce[107]. Capital Expenditures and Investments - Capital expenditures for 2024 totaled $183,188,000, a decrease from $364,617,000 in 2023[77]. - Capital expenditures in Q4 2024 increased 24% quarter-over-quarter to $10 million, while full-year capital expenditures decreased 27% to $31 million[22]. - Capital expenditures for 2025 are projected to be $26 - $32 million, primarily for sustaining capital and underground development[26]. - The company invested approximately $77 million in exploration in 2024, significantly up from $41 million in 2023[11]. Strategic Initiatives - The acquisition of SilverCrest for $1.58 billion closed on February 14, 2025, enhancing Coeur's position as a leading global silver company[4][16]. - The company plans to continue its market expansion and product development initiatives to drive future growth[75]. - The exploration program in 2025 will focus on extending and building the resource base adjacent to current resources, following up on key targets outlined in the 2024 regional program[53]. Market Conditions - Average realized prices for gold and silver in 2024 were $2,156 and $27.95 per ounce, respectively, compared to $1,825 and $24.21 per ounce in 2023[9][10]. - The average gold spot price per ounce in 2024 was $2,386, while the average silver spot price was $28.27[69]. - The average zinc spot price per pound in 2024 was $1.26, and the average lead spot price was $0.94[69].

Industry Overview - The Zacks Mining - Non Ferrous industry is facing challenges due to weak demand in China, which is impacting metal prices, alongside inflated costs, labor shortages, and supply-chain issues [1][4][5] - The industry includes companies producing non-ferrous metals such as copper, gold, silver, cobalt, molybdenum, zinc, aluminum, and uranium, which are essential for various sectors including aerospace, automotive, and construction [3] Current Market Conditions - Copper prices have been negatively affected by China's property crisis, with economic uncertainty leading to concerns about future demand [4] - Uranium prices have decreased by 18.9% this year, currently around $73 per pound, due to anticipated supply increases [4] - Gold has increased by 26% year-to-date, while silver has risen by 21%, driven by geopolitical tensions and central bank purchases, although manufacturing sector contraction may impact silver demand [4] Demand and Future Prospects - Demand for non-ferrous metals is expected to remain strong, particularly due to the rise in electric vehicles and renewable energy, as well as infrastructure upgrades under the U.S. Infrastructure Investment and Jobs Act [6] - The industry is projected to face a future deficit in metal supply, which could eventually lead to higher metal prices, benefiting the industry in the long run [4] Labor and Cost Challenges - The industry is experiencing a shortage of skilled labor, leading to increased wages and potential production disruptions [5] - Escalating production costs, including energy and materials, are prompting companies to focus on improving sales volume and operational efficiencies [5] Investment Opportunities - Companies like Southern Copper Corporation (SCCO), Coeur Mining (CDE), and Energy Fuels (UUUU) are highlighted as potential investment opportunities due to their strategies in building reserves, controlling costs, and investing in technology [2][15][20][24] - CDE is expected to see a significant earnings increase of 165% year-over-year for fiscal 2024, supported by its acquisition of SilverCrest Metals [16] - SCCO anticipates a 7% increase in copper production in 2024, driven by recovery efforts and significant capital investments exceeding $15 billion [20][21] - Energy Fuels is expanding uranium production and entering the medical isotope market, despite a 28.6% decline in stock value over the past year [24][26] Industry Performance Metrics - The Zacks Mining - Non Ferrous industry has gained 1.2% over the past year, outperforming the Zacks Basic Materials sector, which declined by 10.5% [9] - The industry's current forward 12-month EV/EBITDA ratio is 8.13X, significantly lower than the S&P 500's 24.78X, indicating potential valuation opportunities [11]

Gold and Silver Market Overview - Gold reached an unprecedented high of $2,790 an ounce in October 2024, with a year-to-date growth of 28%, potentially marking its largest annual gain since 2010 [1] - Silver also saw a significant increase of 27% this year, peaking at $35 an ounce in October, the highest since 2012 [1] Demand and Investment Trends - Total gold demand rose by 3% year-over-year in the first three quarters of 2024, with a record demand of 1,313 tons in Q3, surpassing $100 billion in value for the first time [3] - Investment demand for gold climbed 22% year-over-year in the first three quarters of 2024, with global physically-backed gold ETFs experiencing inflows of 95 tons in Q3, ending a nine-quarter streak of outflows [5] - Bar and coin investment in gold reached 859 tons in the first nine months of 2024, exceeding the 10-year average of 774 tons, with a record value of $63 billion [4] Central Bank and Geopolitical Influences - Central banks continued to add gold to their reserves, driven by geopolitical risks and economic concerns [4] - The Federal Reserve's interest rate cut of 25 basis points initially caused a dip in gold and silver prices, but they quickly rebounded, indicating strong underlying demand [7] Future Projections for Gold and Silver - Analysts expect gold prices to reach $3,000 an ounce in 2025, influenced by ongoing geopolitical uncertainty and potential tariff concerns under President-elect Trump's agenda [9] - Global industrial demand for silver is projected to rise 7% in 2024, driven by applications in the green economy, particularly in the photovoltaic sector [8] Company-Specific Insights - **Coeur Mining (CDE)**: Expected to achieve production targets of 4.8-6.6 million ounces of silver and 37,000-50,000 ounces of gold in 2024, with a projected earnings growth of 165% for 2024 and 311% for 2025 [13][14] - **Pan American Silver (PAAS)**: Following the acquisition of Yamana Gold, the company is on track for significant growth in silver and gold production, with earnings expected to surge by 525% in 2024 [15][17] - **Fortuna Mining (FSM)**: Projected to produce 343-385 thousand ounces of gold and 4-4.7 million ounces of silver in 2024, with earnings growth estimates of 118% for 2024 [18][19] - **Fresnillo (FNLPF)**: Anticipated silver-equivalent production of 101-112 million ounces in 2024, with earnings growth of 45.2% for 2024 [20][21] - **New Gold (NGD)**: Expected gold production of 300,000-310,000 ounces in 2024, with earnings growth of 157% for 2024 [22][23]

Group 1 - Coeur Mining (CDE) is outperforming its peers in the Basic Materials sector, with a year-to-date return of 111.4% compared to the sector average of -5.1% [4] - The Zacks Rank for Coeur Mining is 1 (Strong Buy), indicating strong analyst sentiment and a positive earnings outlook, with a 91.7% increase in the consensus estimate for full-year earnings over the past three months [3] - Coeur Mining belongs to the Mining - Non Ferrous industry, which has an average gain of 11.4% this year, further highlighting its strong performance within this specific industry [5] Group 2 - CF Industries (CF) is another Basic Materials stock that has shown solid performance, returning 13.4% year-to-date, and also holds a Zacks Rank of 1 (Strong Buy) with an 8.4% increase in the consensus EPS estimate over the past three months [4][5] - The Mining - Non Ferrous industry, which includes Coeur Mining, is ranked 77 in the Zacks Industry Rank, while the Fertilizers industry, which includes CF Industries, is ranked 173 and has declined by 13.2% this year [5][6]